Related-Party Transactions

12 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related-Party Transactions

The Company entered into an agreement on January 24, 2006 with the Heart of Iowa Coop (HOIC), dba Key Cooperative, a member of the Company, to provide 100% of the requirement of corn for use in the operation of the ethanol plant.  The agreement could be terminated before the end of the term by providing six months' notice of termination and paying the other party $2,000,000, reduced by $50,000 for each completed year of the agreement.

On April 10, 2012, the Company delivered notice to Key to terminate the Amended and Restated Grain Handling Agreement they held with Key. The termination of the agreement was six months from the date of notice, October 10, 2012. The Company recorded a termination cost of $1,700,000 as required under the agreement, which was expensed for the quarter ending June 30, 2012. Payments of $425,000 will be made annually over a four year period with interest at 3.25%, due on January 1 of each year. Interest expense paid to Key was $30,993, none and none for the years ended September 30, 2013, 2012 and 2011, respectively.

On January10, 2013, the Company began originating its own corn.

The Company purchased corn from Key totaling $85,648,581, $128,490,494 and $127,764,206 for the years ended September 30, 2013, 2012 and 2011, respectively. 

As of September 30, 2013, the Company has a corn cash forward contract with Key that will be delivered in October 2013. The corn commitment is for $85,808. The Company also has a corn basis forward contract that will mature October 2013 and totals 51,000 bushels.  The Company has made miscellaneous purchases from Key amounting to $76,068, $200,610 and $84,739 for the years ended September 30, 2013, 2012 and 2011, respectively. The 2012 purchases include $117,562 in grain storage fees. As of September 30, 2013 and 2012 the amount due to Key is $151,747 and $829,067, respectively.

For the years ended September 30, 2013, 2012 and 2011, the Company purchased corn totaling $6,523,278, none and none from Heartland Co-op, a member of the Company. The Company has a corn cash forward contract with Heartland Co-op that will be delivered in October 2013. The corn commitment is for $16,962. As of September 30, 2013 the amount due to Heartland Co-op is $67,687.

For the years ended September 30, 2013, 2012 and 2011, the Company purchased corn totaling $9,262,327, none and none from Mid Iowa Cooperative, a member of the Company. As of September 30, 2013, there is no amount due or corn commitments to Mid Iowa Cooperative.

The Company purchased corn from several other members totaling $4,982,894, none and none, respectively, for the years ended September 30, 2013, 2012 and 2011. As of September 30, 2013, the Company entered into several corn cash forward contracts with several members representing a corn commitment of $309,845. These contracts mature at various dates through March 2014. As of September 30, 2013 the amount due to other members is $334,415.

The Company is also purchasing propane and anhydrous ammonia from Innovative Ag Services (IAS), a member of the Company. Total purchases for the years ended September 30, 2013, 2012 and 2011 were $244,337, $170,878 and $16,402, respectively. As of September 30, 2013, the amount due to IAS is $629.